By Clyde Mooney
One of the world's largest accounting firms has warned of a potential rise in businesses reaching insolvencies with the looming economic climate of 2012.
RSM Bird Cameron, core member of multinational accountants RSM International, has released a list of proactive business practices to assist with the challenges of the coming year.
Andrew Graham, national head of business solutions told TheShout that disappointing retail trading in December and January has already meant that some businesses have started the new year with cash flow difficulties.
"The Australian hotel and liquor industry, like many industry sectors, could be hit by consumers tightening their discretionary spending, and businesses need to find new ways to retain and attract clientele throughout 2012," he said.
RSM’s Top 10 Business Tips:
1. Review the products and services you sell and tailor the mix to appeal to changing customer needs for 2012. Considering and plan for other times in the year when customer needs change, such as Easter and the change in seasons.
2. Review pricing structures to ensure competitiveness and profitability. Put formal procedures in place to monitor and proactively respond to competitor pricing changes.
3. Review stock levels to make sure you can satisfy customer demand for profitable product and service lines, and identify slow-moving stock that can be liquidated as ‘bargain buys’.
4. Review sales, marketing and promotion plans and make sure they are optimised to help achieve the best results throughout 2012. Ensure all staff are aware of the targets for each week and be proactive in addressing shortfalls.
5. Review staffing plans and confirm acceptance of the rosters by all staff. For non-retail businesses, aim to schedule annual leave plans for the year as early as possible to ensure the business continues to operate effectively all year ‘round.
6. Review fraud and theft protection systems and ensure all staff are reminded of their responsibility to be vigilant at all times.
7. Review debtor lists frequently and regularly, and actively chase all overdue accounts.
8. Review the use of finance products, for their effectiveness. Overdrafts, premium funding, lease facilities and cash flow funding products can all be excellent tools to help match a business’ cash flow with planned outlays.
9. Complete a GST health check. Small businesses are in danger of losing time and money because of unreliable or out-dated business systems causing them to incorrectly report GST.
10. Remember that you deserve to enjoy a break as well and it is vital that you are able to operate well. Plan some time off during slower periods throughout the year so that you are well rested and enthusiastic in the busier periods. Take care of your health and enjoy downtime with family and friends during the year.